Insane in the Membrane

The iconic brand Gore-Tex is under siege from newcomers who want a piece of the billion-dollar market for waterproof-breathable fabrics. The battle is both wonky and intense, complete with arcane science, trade secrets, industry flame wars, and confidential government-run investigations on two continents. MIKE KESSLER steps into the wet room.

THE BIANNUAL GATHERING of the gear tribes is typically a magnanimous affair. Held each winter and summer in Salt Lake City's 675,000-square-foot Salt Palace convention center, the Outdoor Retailer trade shows (OR for short) draw some 20,000 industry types—an assortment of hyperfit gear wonks who pal around, show off their wares, and tout their stuff to resellers and the press. At OR, VPs wear Keen sandals and sales guys balance on slacklines; even ambitious young marketers rarely speak ill of the competition.

That's why the banner at last summer's show was so striking. Ten feet tall and 30 feet wide, it was the first thing people saw when they walked through the convention-center doors. Next to an image of a professional climber who’d been Photoshopped to look like someone from a “Faces of Meth” poster—vacant stare, yellow pallor—was the explanation, spelled out in massive, no-nonsense type: "Endured Constant Overheating and Freezing for 12 Years." And below, the payoff: "Liberated by NeoShell." While the message would probably seem cryptic to industry outsiders, everyone here knew exactly what it meant: NeoShell is better than Gore-Tex.

Similar advertisements for NeoShell, a new waterproof-breathable material made by Polartec, the Massachusetts-based fabric manufacturer best known for popularizing synthetic fleece, were suspended throughout the Salt Palace and plastered on billboards around town. They’ve subsequently appeared on websites and in magazines, including this one. NeoShell, which debuted last fall in top-of-the-line jackets from the likes of Marmot, North Face, and Mammut, is the company’s first-ever waterproof-breathable product. “We did tons of research,” Nate Simmons, Polartec’s marketing director, told me at the company’s booth. “We wouldn’t have come into this space unless we were confident we could compete.”

While NeoShell was Gore-Tex’s most conspicuous new challenger at OR, it wasn’t the only one. At the elaborate Columbia booth, staffers were just as determined to upstage Gore-Tex by touting the breathability of their own new proprietary fabric, OmniDry, which the company launched last year with a marketing video vowing to “take down Gore-Tex.” Woody Blackford, Columbia’s VP of global innovation, was dressed in a white lab coat for theatrical effect. He guided me to a display that looked like something out of a well-funded high school science fair, with two hot plates sitting side by side. Blackford squeezed a drop of water onto each plate, then placed a cutout from a jacket that features OmniDry, among other exclusive technologies, onto one and a swatch of a generic jacket with an ePTFE membrane, the main ingredient in Gore-Tex, onto the other. He then placed a shallow glass cup atop each swatch. Within minutes, the cup on the OmniDry sample had fogged up. The one atop the generic swatch, meanwhile, remained mostly clear. (Several minutes later it was cloudy, too.) The reason the OmniDry cup fogged up so much faster, Blackford explained, is that the fabric is better at passing moisture vapor. In other words, it’s more breathable. “If you’re going to be out sweating,” he asked, “which one would you want to wear—the one that stays wet or the one that gets dry?”

A few years ago, this kind of brazen, taste-test marketing against Gore-Tex would have been unheard of. Over the past three decades, Gore has become one of the most powerful and recognizable brands in the world, transforming its proprietary membrane into a household name, as synonymous with waterproof-breathable as Coke is with soda. That transformation has been very good for the outdoor industry. Some of the largest companies on the OR floor were literally built through their affiliation with the Gore-Tex brand. According to some estimates, Gore now commands more than 70 percent of a waterproof-breathable outerwear market that didn’t even exist before its membrane was developed, a market that now, by some estimates, tops a billion dollars.

Gore-Tex might be a cash cow for gear manufacturers, but you wouldn’t have heard a lot of gratitude by surveying last summer’s OR crowd. I asked dozens of industry veterans and designers about the unprecedented marketing attacks from Columbia and Polartec, and the first thing I noticed was the fear. Hardly anyone was willing to speak about Gore-Tex on the record. When I asked one manufacturer why people were being so coy, he told me, “Everybody hates Gore, everybody needs Gore, so everybody’s afraid of Gore. They can make or break you.” He was referring to an open secret among industry insiders: that Gore’s licensees are afraid to work with non-Gore technologies, lest the market leader terminate their contracts.

Whispers about Gore’s heavy-handed tactics have been circulating for years, but allegations have recently gotten serious enough that both federal and international regulatory agencies are involved. In the fall of 2010, Columbia and its Italian subsidiary, OutDry, a small company that specializes in waterproof-breathable technology, submitted a 55-page complaint to the Commission of the European Union. While the complaint is confidential, the grievances are said to be straightforward. “In order to maintain market dominance,” Peter Bragdon, Columbia’s lead counsel, recently told me, “W.L. Gore and Associates engages in unfair business practices, intimidating footwear and glove licensees into loyalty and violating antitrust laws by excluding the competition.” In other words, Gore is being accused of systematically preventing manufacturers from gaining access to competing products.

At almost exactly the same time, a “non-public” complaint against Gore was put forth to the U.S. Federal Trade Commission. While the complainant’s name (or names) is confidential under federal law, and no one has publicly taken credit, the grievance was convincing enough for the FTC to launch a follow-up investigation last spring, a fairly uncommon response. “While antitrust complaints are filed at a rate of several hundred per year, only around 10 percent become full-scale investigations,” a former FTC lawyer, who requested anonymity, told me. “The government is picky.” In the meantime, outerwear heavyweights are waging a battle on terms unfamiliar to this crowd, and the otherwise collegial outdoor industry may never be the same again.

SEVENTEEN OF GORE’S 60 worldwide facilities are scattered between Baltimore, Philadelphia, and Wilmington, Delaware, a distinctly American, almost contourless triangle of former farmland that’s gracelessly yielding to modern industry and metastasizing strip malls. This is Turnpike Country. Factory Land. The last place you’d expect to find captains of the outdoor industry. That is, until you step into the company’s Capabilities Center in Barksdale, Delaware. Nestled tastefully beside a woodsy ribbon of blacktop, the center is essentially a curated display of Gore’s contributions to the gear world and beyond. My guides were Cynthia Amon, an amiable spokeswoman with unflappable company loyalty, and engineer Tim Smith, a fit 32-year-old with a knack for decoding complicated science.

“Like many great innovations, Gore-Tex wasn’t so much invented as it was discovered,” Smith explained, pointing to the first of many displays. It was 1969, and a man named Bob Gore was in his Newark, Delaware, basement experimenting with a piece of polytetrofluoroethylene, or PTFE, a fluorocarbon solid that’s impervious to water and UV rays—and best known by its popular trade name, Teflon. Bob worked for his father, Bill, a former DuPont engineer whose 11-year-old company, W. L. Gore and Associates, had been making PTFE housing for cables and wires used by the burgeoning airline and telecom industries.

Down in his basement, the younger Gore wanted to know what would happen if he gave PTFE a powerful yank, rather than apply the slow-stretching process required to make Teflon. Expanded PTFE (ePTFE), he learned, could be manipulated into a virtually weightless film, like a trashcan liner but exponentially thinner. This synthetic skin, or membrane, contained billions of microscopic pores that turned out to be auspiciously sized: water droplets couldn’t fit through, but moisture vapor—the steam that comes off your body when you sweat—could. In other words, Bob Gore discovered that ePTFE was waterproof and breathable.

In 1976, one of the first jackets with a Gore-Tex membrane debuted in the Early Winters catalog, which touted the garment as “possibly the most versatile piece of clothing you’ll ever wear.” This wasn’t bombastic marketing-speak. “Before Gore-Tex came along, recreating outdoors was not always especially comfortable,” Michael Hodgson, the former president of the trade-news website SNEWS, which publishes the OR Daily newspaper, told me. “The advent of Gore-Tex brought us to a place where we stay drier, and thus warmer, for longer periods of time. This, of course, made wet-weather activities a lot more enticing, which in turn made people more apt to get outside.”

The outdoor industry and consumers were quick to embrace the new technology. By the late eighties, thanks in part to Gore’s well-funded and savvy marketing efforts, Gore-Tex had become a household name and a mandatory part of every outdoorsman’s gear closet. Gore required its licensees to use the term “Gore-Tex” somewhere in the name of the product (or on the actual item) and encouraged them to affix its now famous diamond-shaped black hangtag to the garment on the rack, a suggestion that licensees were happy to follow. “In the eighties, using Gore-Tex didn’t just help businesses,” a former designer with one of the big outerwear companies told me, on condition of anonymity. “It took our businesses to another level. When you’re selling thousands of units at $450 each, you’re very aware of the value of the Gore-Tex brand.”

Gore thrived beyond the outdoor market, too. As Amon pointed out, “Gore products are everywhere. Even inside of us!” She walked me through the company’s mini museum, a collection of exhibits replete with an astronaut suit and medical displays, noting that Gore-made PTFE or ePTFE is found in million-dollar ropes for oil rigs, guitar strings, dental floss, hernia patches, fake arteries, aneurism stents, and hundreds of other products. It’s no wonder that W. L. Gore and Associates is a $3 billion operation as of 2012. (Gore, a privately held company, declined to disclose how much of its revenue comes from its fabrics division.)

Gore supplies only one critical ingredient in the manufacturing of waterproof-breathable outdoor gear, but it guarantees every product that uses the Gore-Tex membrane. For that reason, it holds licensees to stringent and exacting agreements. Any company that puts the material in its wares is required to use Gore-certified factories and machinery, the latter of which is typically patented, fabricated, and leased to the factories by Gore itself. The fabric maker is also intimately involved in every step of the design and production processes, a policy that has grated on some brand managers and designers over the years. “You had to buy and use Gore-made seam tape that was exactly 24 millimeters wide,” John Cooley, who for much of the nineties served as Marmot’s VP of sales and marketing, recently recalled. “You had to have zipper flaps that were a certain width. They were highly controlling.”

In a way, working with Gore is like opening a franchise. You don’t just erect the golden arches and throw a few burgers on the grill—you go to Hamburger U, follow the manual, and work within an established infrastructure. Because Gore was founded and is still run by engineers, its testing process is famously scientific. The Maryland quality-control facility, which I also toured, is equipped with a rain room, a climate chamber, and more machines than can be counted over the course of an afternoon visit. “We’re proud of the role we play from inception to finished product,” Amon told me at the end of my seven-hour, two-state, three-facility tour. “We don’t just sell the best waterproof-breathable membrane. We sell a service so that our customers—and their customers—come back. We have to be sure that Gore-Tex lives up to its promise.”

While jumping through all of Gore’s hoops is an expensive and time-consuming process, most of the industry’s top brands told me that a first-rate product comes out the other end. “To us, it’s beneficial to work with someone who’s as dedicated to performance and quality as we are,” Carl Moriarty, the lead designer at Arc’teryx, one of the most innovative and respected brands in the business, told me. While Marmot’s Cooley admitted that working with Gore could be frustrating, he too empathized with its philosophy. “Because of Gore’s rigid control over licensees and design, the performance bar was raised,” he said. “Anyone making a Gore-Tex jacket had to make it correctly. As a result, the whole breed improved, and the consumer ultimately benefited.”

Of course, no one had to buy or use Gore-Tex. By the time Gore’s primary ePTFE patent expired, in 1997, there were dozens of lower-priced, non-ePTFE alternatives, made by companies such as Japan’s Toray and China’s Formosa Mills. Gear makers could now offer a host of jackets with their own house-brand fabrics, like North Face’s HyVent, Patagonia’s H2No, and Marmot’s MemBrain. The key was how they were marketed. As long as Gore’s licensees didn’t promote them as superior to Gore-Tex, the company was willing to tolerate their existence. The performance hierarchy had been established: Gore at the top, everyone else below.

Then, in 1999, a small company called BHA Group began peddling an ePTFE membrane, similar to Gore-Tex, called eVent. Used for years in industrial smokestack filters, the membrane, tweaked to work in garments, was purportedly more breathable than Gore’s. Companies that had grown weary of Gore’s micromanaging now had a viable ePTFE alternative. “eVent was every bit as good as Gore-Tex,” claimed a marketing specialist who works with a number of brands and requested anonymity. But getting a piece of the waterproof-breathable market wasn’t that simple. “Gore literally built the industry,” said the marketer. “It’s hard to come in after two and a half decades and compete with such a well-established and respected brand.”

Since the arrival of eVent, Gore has successfully maintained its coveted market position, but its continued dominance wasn’t what fueled the current hostility, say insiders. It was the measures the company allegedly took to remain there.

WHILE THE LEGAL battles against Gore are concerned solely with its business practices, the ongoing campaign for hearts and minds in the marketplace is all about fabric performance. In case it’s not already clear, the debate over who makes the best waterproof-breathable technology is about letting moisture out, not keeping it at bay. Barring leakage resulting from excessive wear and tear or saturation—a.k.a. wetting out—any self-respecting brand will turn back rain. The fight concerns the dark, extremely niche art of breathability.

The very term breathable is a bit of a misnomer. While there are waterproof-breathable running and biking jackets, they don’t breathe that well. (Unless it’s really wet or really cold, you’re better off wearing some sort of water-resistant soft shell for aerobic pursuits.) The most obvious sign that breathability is relative is that many jackets have mesh-backed pockets or, more commonly, pit zips to let moisture vapor escape.

Still, the amount these fabrics do breathe is what keeps high-end fabric makers obsessively tinkering and tweaking. Parsing the difference requires a quick construction lesson. Gore-Tex, like the majority of other waterproof-breathable fabrics, uses a so-called three-layer technology. On the outside is the face fabric, the material you see when admiring a garment on the rack. This is layer number one, which is also treated with a durable water-repellent (DWR) finish, a first line of defense whose molecules bond to the jacket’s fibers and therefore don’t inhibit breathability. Layer two, which you can’t see, is the ePTFE membrane with a separate, slathered-on protective coating, made of polyurethane and other ingredients, that protects the ePTFE against contaminants, such as sweat, body oil, and sunscreen residue, that can compromise breathability. And, finally, there’s usually a third inner layer, the softer lining you feel against your skin.

eVent is slightly different. You still have a DWR-treated face and an ePTFE membrane, but rather than use a separate, polyurethane-based coating to protect the membrane, eVent infuses it with polyacrylate, among other ingredients, which allegedly makes it more breathable but, according to some fabric experts, less durable than Gore-Tex.

NeoShell, not unlike the many house-brand fabrics currently found in lower-priced jackets by manufacturers big and small, ditches the ePTFE membrane altogether, instead using a polyurethane membrane. Yet, as with eVent, NeoShell’s protective ingredients are infused into the membrane, not glued over it as a separate layer, the way it typically is in Gore-Tex.

Further complicating things is the issue of convection, or what’s now known as air permeability. Not to be confused with breathability, air permeability refers to whether a fabric allows a cold breeze to come in from the outside or the hot air that builds up inside the jacket during exertion—not just the vapor from sweat—to escape, cooling you down. In theory, virtually all waterproof-breathable hard shells are windproof—meaning they’re not air permeable and that hot air thus has no way of escaping. But ask Columbia or NeoShell or eVent and they’ll tell you that those little poofs of air billowing around beneath your jacket can miraculously escape through their membranes. You need not open pit zips or unzip your jacket, they insist; the fabric does it for you. Gore disputes this claim. “Gore’s belief,” said the company’s Tim Smith, “is that something cannot be windproof and meaningfully air permeable at the same time.”

Perhaps no one has dedicated more time to testing the performance of these fabrics than Alan Dixon, the cofounder of BackpackingLight.com. Dixon has spent hundreds of hours analyzing the claims of waterproof-breathable garments; he even wrote an article, entitled “High Exertion Moisture Accumulation in Rain and Wind Shells,” research for which involved hiking the same trail, at the same time, at the same pace, for weeks. His conclusion? Even though he’s been known to have an eVent bias, he acknowledged that “it’s splitting hairs. Yes, there are some differences in the membranes themselves. But to the average person, they’re often slight. It’s a matter of degrees.”

In the lab, there are plenty of ways to measure those degrees. There are “cup tests,” “inverted cup tests,” “sweaty hot plates,” “sweaty mannequins,” and half a dozen other contraptions that each company has devised to measure the rate of “moisture vapor transfer” and “resistance to evaporative transfer” and “dynamic moisture permeation,” using formulas, numbers, and jargon fit for an MIT lecture hall. Unfortunately, there’s no global standard, and none of these tests are universally conducted or regulated by an independent party. Gore, eVent, Polartec, Columbia, you name it—they’re all essentially cherry-picking their own data and then stamping an A+ on their ads and catalogs. Furthermore, scientifically measuring performance in the field is nearly impossible. There are dozens of variables, from how many and what types of layers you’re wearing to the thickness of a garment’s face fabric to relative humidity and wind speed.

Even if you could objectively determine which membrane is more breathable, it’s only one piece of the waterproof-breathable puzzle. “The membrane is just the starting point,” said Moriarty of Arc’teryx, one of the few companies to use Gore-Tex fabric exclusively in its waterproof-breathable jackets. “These fabrics work through a synergy of many elements—membrane, face fabric, backing fabric, and durable-water-repellent finish, to name a few. Once you have these elements correct, then you can begin to work on how to build that fabric into a product.” Phillip Gibson, supervisory physical scientist at U.S. Army Natick Soldier Research, Development and Engineering Center in Massachusetts, echoes Moriarty’s assessment. “Garment design is as important as the material itself,” he told me. “There is no single, magical membrane. It’s how you apply it that counts.” For example, whereas BackpackingLight’s Dixon thinks eVent breathes better in a wider range of conditions, Gibson told me that, because Gore strikes a reliable balance of materials and construction, “soldiers seem to like Gore-Tex best.” Military officials won’t disclose a breakdown of the waterproof-breathable technologies they use, and Gore won’t say how much money it hauls in from supplying Uncle Sam. But, says Gore representative Amon, “we do a huge amount of business with them.”

IN 2004, GENERAL ELECTRIC, one of the country’s largest and most profitable conglomerates, purchased BHA Group, the small company that brought eVent to market. For the first time, it looked as if someone had the money and muscle to rearrange the waterproof-breathable hierarchy. But it didn’t happen. According to dozens of industry veterans I spoke with, Gore responded to eVent—and the threat of other technologies—with an iron fist.

According to multiple sources, in 2002, shortly after introducing a product with eVent, the footwear maker Vasque had its license terminated by Gore. (Vasque declined to comment for this story.) Then, in 2003, according to OR Daily, venerable gear maker and Gore licensee Lowe Alpine debuted a new line of outerwear featuring eVent, only to promptly pull the garments and revert back to using Gore-Tex. (Lowe Alpine later closed up shop entirely.) Insiders say there are dozens of similar stories about Gore giving its licensees an us-or-them ultimatum, but no one would offer any on the record. When I asked Gore about these specific allegations, a government-relations associate, Michael Ratchford, told me that he’s “not going to discuss relationships with individual brands.”

The most vocal Gore critic is probably Matteo Morlacchi, the 46-year-old co-founder of OutDry, which in the early 2000s devised a new way to bond a polyurethane membrane to fabrics. Typically, the membrane in Gore-Tex gloves and boots is a separate layer, sandwiched between the liner and the outer layer; OutDry’s technology adheres it directly to the fabric, which, among other benefits, prevents moisture from saturating the exterior of the glove or boot. “In 2004, we made successful tests and developments with the three top mountaineering boot makers in Italy—Scarpa, La Sportiva, and Garmont,” he told me at his OR booth last year. “All of them were ready to adopt OutDry for their 2005 collections but were stopped by Gore.” That same year, according to Morlacchi, Gore even pressured Garmont to remove its OutDry-equipped boot from the display at Europe’s big trade show. (All three boot makers declined to comment for this story.)

Morlacchi told me that, more recently, something similar happened with Mountain Hardwear. In 2008, the company began using OutDry in its gloves, at which point Gore pulled its license for all accessories. (Mountain Hardwear is also owned by Columbia, which stands behind Morlacchi’s allegation.) In another instance, in 2009, said Morlacchi, a consumer used an industry discount to buy 43 pairs of OutDry-equipped gloves; a short while later, disparaging reviews of the same model of gloves—citing the recent purchase of 43 pairs—appeared on the REI and Backcountry.com websites under the pseudonym “chilikook.” After some sleuthing, Mountain Hardwear discovered that an order of exactly that number of pairs of gloves had been made by a Gore employee and shipped to a Gore business address.

Ratchford initially told me that he hadn’t heard of the chilikook incident, but he later confirmed in an e-mail that it was true. As for the pulling of the licenses, he maintained that the EU complaint is “without merit.” While that may be the case, the EU nevertheless decided to launch a formal investigation last summer.

Even the retail giant REI, which in 2008 began using eVent in a few house-branded garments, claims it hasn’t been immune to Gore’s alleged strong-arming. “Shortly after we introduced our eVent line” in jackets and pants, Libby Catalinich, REI’s director of corporate communications, told ESPN.com last year,“Gore terminated our footwear license” and “essentially eliminated our REI-branded footwear.”

For this reason, many believe that REI, perhaps with help from eVent’s parent company, GE, filed the confidential complaint with the FTC. Catalinich wouldn’t confirm or deny whether REI was involved but said the company would cooperate with the FTC if asked. Columbia and eVent declined to comment on the matter; Polartec’s Nate Simmons told me that he doesn’t know who filed the complaint.

In the meantime, last spring the FTC subpoenaed Gore for every sliver of documentation dating back to 2001 that related to its waterproof-breathable-fabrics business. Gore attempted to fight the subpoena—its petition is public and searchable on the FTC’s website—saying that complying would cost millions of dollars and man-hours. The FTC wouldn’t budge. Gore’s Ratchford told me that the FTC complaint, like the one in Europe, is baseless and that time will prove him right. “We have and will continue to cooperate with the FTC,” he said, “and we’ll keep providing innovative technology and products with confidence in the integrity of our business practices.”

UNTIL THE EU AND FTC release their findings—which might not happen for several months or, more likely, years—it’s impossible to tell whether Gore has really been abusing its market dominance or is simply the victim of other manufacturers’ envy. While there’s an overwhelming, if not maddening, amount of information about membranes and face fabrics and construction to sift through, there’s practically none about either complaint against W. L. Gore and Associates. As with many cases, the current FTC investigation is so sensitive that the agency is forbidden to even acknowledge it.

It’s possible that, once the FTC concludes its investigation, the case will be dismissed and the allegations of exclusionary practice—in this case locking up the market and stifling competition in violation of FTC codes—will be proved baseless. If Gore isn’t exonerated, according to the former FTC lawyer, then chances are Gore will “enter into a consent decree, which basically says ‘Thou shalt not sin again.’ ” If this happens, they agree to change their behavior or face stiff penalties. Of potentially greater damage, a consent decree unseals the FTC case files, which could then be used as ammunition against Gore by any number of entities interested in suing the behemoth.

While the antitrust matter gets sorted out, Columbia, eVent, and NeoShell are still using their technology—and fighting words—to capture market share from the company that forever changed the way we recreate outdoors. For NeoShell, it appears to be working; North Face and Marmot now sell both Gore-Tex and NeoShell jackets, and by next fall some two dozen brands will be selling NeoShell garments. eVent hasn’t been quite as successful. Though the fabric can now be found in more than 60 brands, GE isn’t happy with the membrane’s position in the market. A few years ago, the conglomerate decided to change its business model and also sell its membrane as an unbranded fabric—meaning that, unlike with Gore-Tex, gear makers can simply buy eVent fabric and call it what they want. “We’re happy to accommodate whatever suits a customer’s business needs,” Glenn Crowther, GE’s global-product-line leader and a former Gore employee, told me at the OR show, firing a familiar-sounding shot across Gore’s bow. “Who are we to put rules on how garments and footwear should be made and say ‘You can’t use our technology unless you put our name on it’? We don’t need the credit.” One company that has taken them up on the arrangement is Mountain Hardwear, whose Dry.Q fabric contains GE technology that’s also used to produce eVent.

Remarks like Crowther’s were common last summer, but if you had visited with the Gore-Tex team on OR’s trade-show floor, the extent and bitterness of the turf war wouldn’t have been remotely apparent. At Gore’s small but bustling booth, it was business as usual. Rather than snarky ad campaigns aimed at its rivals, there were a dozen oversize posters emblazoned with endorsements by a roster of athletes and executives. (“Gore-Tex is the gold standard for comfort and protection in the world’s most challenging environments,” read a quote from North Face president Steve Rendle.) The rest of Gore’s booth seemed to speak for itself, too, lined as it was with jackets and gloves and shoes from all the major players. Gore-Tex’s representative didn’t even give me the hard sell. “Let me know if you need anything,” she said from across the booth, gesturing toward the spiffy new gear. "Whatever company you love, it's probably on this wall."